Netflix-Like Book Services Would Be Happy if You Read Less

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Netflix-Like Book Services Would Be Happy if You Read Less

Scribd

On-demand everything is really hot right now.

As consumers, we’ve come to expect that endless catalogs of content will spring to our fingertips at our command. There’s movies and TV (Netflix, Hulu Plus, Amazon Prime, HBO Now) and streaming music (Spotify, Apple Music, Rdio). All we have to do is subscribe.

Subscription services for e-books—the so-called "Netflix for books" model—are also popping up everywhere. All-you-can-read startups like Scribd and Oyster vie with options from giants like Amazon and Google. But they're facing a weird problem. Many hands have been wrung over the decline of the American book lover. According to a Gallup poll, the number of non-book-readers hasnearly tripled since 1978. And according to the Pew Research Center, nearly a quarter of American adults have not read a single book in the past year. But the challenge for e-book services are people who like to read too much.

As it turns out, one species of American reader is thriving. Readers of romance novels read a lot. Like, a lot a lot.

The irony for e-book services is that their businesses are more successful the less people read.

Of course, we already knew this. Romance, fanfic, and other addictive genres inspire some of the biggest and most rabid fanbases, as the wild success of Wattpad has shown. But in a recently leaked letter, San Francisco startup Scribd revealed the company was planning to pull thousands of romance titles because their popularity was costing the company too much money.

At issue is the way Scribd’s subscription model works, which is different from the models we’re used to seeing on services like Netflix and Spotify. Unlike on those services, where the norm is licensing content to offer on their platforms, Scribd and its closest competitor Oyster pay publishers a sum of money each time “a fair portion” of a book is read. That and the fact that both Scribd and Oyster offer valuable reader data made for apparently sweet deals for publishers, who have lined up behind these services. But the deal in the end wasn't so sweet for Scribd.

"We bore the majority of the risk when establishing a business model that paid publishers the same amount as the retail model for each book read by a Scribd subscriber," the company noted in its letter. When readers read too much, as romance readers apparently did, the costs become too much to bear. Which points to a funny irony for e-book services: as long as they pay publishers every time a book is read, their businesses are more successful the less people read.

Finding a Balance

Today Scribd said it was doubling its catalog from Big Five publisher Macmillan, adding more than 1,000 new titles to nonfiction and fiction categories, as well as over 300 titles to the children’s catalog—genres that, though the company doesn’t say so outright, probably won’t be as voraciously read as its romance books.

“In general, the model has worked well, but in some genres, particularly the romance genre, it hasn’t worked out with a huge number of titles,” Trip Adler, CEO of Scribd, tells WIRED. “What we’ve been doing is just balancing the selection for some genres such as romance to get the popular dynamics just right.”

Any romance book coming off the service that readers have already downloaded would remain in the Scribd user’s library for 30 more days, Adler told WIRED, and Scribd will continue to tweak the catalog on an ongoing basis, rotating titles in and out—a tack much more similar to one Netflix has already taken.

But Scribd isn’t the only company making changes to their ebook subscription strategies. Last April, Oyster said it was adding a more traditional e-book store to go along with subscriptions. The company said it hoped the move would help its subscribers browse and discover more books on the platform. But it also appears to be a move to challenge Amazon at its own game.

Turning the Page

Amazon itself is changing, too. It all but acknowledged the reading-too-much quandary last month in announcing a new “pay-per-page” model for its Kindle Unlimited e-book subscription service. Amazon says it will now pay Kindle Unlimited authors royalties based on the number of pages readers read, instead of doling out the royalties based on downloads or how frequently Kindle Unlimited customers download a book and read more than 10 percent of it (what Amazon used to deem “a fair portion” of the book). That’s similar to how Apple Music and Spotify pay artists for music—both models have a pay-per-stream component to their formula.

Though the company declined to say how many Kindle Unlimited pages are read on average per month, the model does seem to be geared towards closer evaluation of reader engagement. But it also raises all sorts of questions about authors being incentivized to write longer versus shorter. It could also encourage indie writers to write page-turners at the expense of quality.

Whatever the impact on books themselves, the subscription model is here to stay, says Scribd's Adler. It's how consumers are getting their movies, TV, and music. It's hard to imagine a future where books stand apart as different. But getting there won't likely be a smooth process. Scribd, Oyster, Amazon and others will keep iterating on their models until they settle on a a satisfying formula—maybe one where reading more turns out to be a good thing.